Sum of Parts Valuation

Evaluating individual pieces of a company for their value and determining of it would make more sense selling individual parts of the company rather than the company as whole.

An example of this would be a conglomerate that trades for $10 billion, but has subsidiaries worth a total of $11 billion. In this example, it would "make sense" to buy the company for $10 billion and sell off the parts for $11 billion, realizing an ROI of about 10% (ignoring costs).